In its most recent budget, the federal government announced its intention to deliver a Canada-wide early learning and child-care plan. This federal expenditure is one of the largest single items in the massive budget document, coming in at $30 billion over the next five years and incurring $8 billion in annual expenses every year thereafter.
One of the government’s main goals with this program is to make it easier for parents, and especially women, to fully participate in the labour market, which would increase GDP per capita in the long run. In order to do so, the Trudeau government intends to make child-care services more accessible by transferring money to the provinces to subsidize those services.
While this objective might seem economically sound, it is the wrong basis for this program. GDP is one thing; well-being is another. Parents should make their own decisions about child care, comparing the costs and benefits of entering the labour market versus staying home. Over-incentivizing the first option could be costly for the well-being of those who prefer to stay with their children during their early years.
Whatever its goals, however, for this program not to be a waste of taxpayers’ hard-earned money, every dollar needs to be spent wisely. Otherwise, child care across the country may end up suffering from the same kinds of problems that afflict Quebec’s daycare system.
While the federal government seems to have placed Quebec’s child-care system on a pedestal, hailing it as the “very best example,” we believe the national child-care plan could — and should — do better. Almost from its inception in 1997, the Quebec daycare system has had long waiting lists that aren’t getting any shorter. Some 51,000 children are currently waiting for a space. Things have gotten to the point where families believe it’s normal to spend several years on a waiting list before getting a slot in a subsidized child-care centre. This is despite the now billions of dollars spent every year throughout the system.
Sadly, this comes as no surprise. For years, parents have begged the government to reduce the bureaucratic hurdles to the creation of new spaces. Authorities have recently responded by abolishing certain steps in the process of developing new spaces, bringing the average delay down from three years to two. Still unaddressed, though, is the fact that unions are demanding more and more every year and are in effect constantly seizing rents from parents. In addition, studies have shown that highly educated women from richer households are the ones who benefit the most from this universal system, since entering the labour market is easier for them. The policy has thus disproportionately helped high-income parents.
Although Quebec laid the groundwork for an important social program, its experience should lead the federal government to rethink its approach to funding a national child-care plan. As currently conceived, the federal program is unlikely to deliver satisfying results.
Luckily, there is a way to maximize the benefits of this ambitious program: Subsidize parents rather than child-care establishments. Funds could even be distributed according to household income, or take the form of tax credits. But with parents in charge, early learning and daycare services would be subject to the rules of a competitive market, in which each establishment has an incentive to provide the very best quality of service it can, at the very best price. Having the money follow the children would also ensure greater accessibility and avoid a one-size-fits-all policy that neither adequately meets the needs of Canadian families nor directs help where it’s needed most.
If the federal government really wants to intervene nationally in child care, it should not follow Quebec’s example. Let’s not, in the name of helping Canadian families, add to their problems by creating a heavily bureaucratic, inefficient child-care system from coast to coast.
Miguel Ouellette is Director of Operations and Economist at the MEI, Maria Lily Shaw is an Economist at the MEI. The views reflected in this op-ed are their own.